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CHAPTER 8: PROGRESSIVISM Progressivism arose as a political movement in the late 1800s in response to a rise in the concentration of economic power following the Industrial Revolution. Liberalism was the political ideology that sparked the American Revolution and remained at the foundation of American politics through the late 1800s. The government’s role within this liberal ideology was to protect individual rights. As economic power became more concentrated in the late 1800s, that liberal ideology evolved so that Americans saw the government’s role not as limited to protecting their rights, but also as protecting their economic well-being. This latter role is the ideology of progressivism. Economists Terry Anderson and Peter Hill note the significance of the Supreme Court case Munn v. Illinois as a landmark progressive event, which they call “the birth of a transfer society.” 1 That 1877 case allowed states to regulate the rates that grain elevators could pay for grain, opening the door for government regulation of various aspects of commerce. The Sherman Antitrust Act, passed in 1890, prohibited business activities that limited competition, allowing the government to dissolve cartels and PROGRESSIVISM 55
egulate or break up monopolies. The Pure Food and Drug Act of 1906 limited the sale of certain medicines, required labeling to be accurate, and created the federal inspection of meat packaging operations. In the twentyfirst century, we take regulations like these for granted, along with professional licensure requirements for many occupations and government regulation of many products and businesses. Economic historian Robert Higgs argues that this progressive agenda came from a change in ideology in the late 1800s, after which people wanted the government to expand its powers to look out for their economic wellbeing in addition to protecting their rights. 2 In the twentieth century, the government responded to crises like wars and economic depression by expanding its budget and powers, ratcheting up its size as the progressive agenda grew. The government extended its regulatory oversight of economic activity to look out for people’s economic well-being by supporting their incomes in addition to regulating commerce. Social Security, Medicare, Medicaid, food stamps, unemployment compensation, and a host of other wealth-transfer programs are designed to protect the economic well-being of many groups of citizens. These programs’ existence shows the extent to which progressivism has become a part of the accepted political ideology in the twenty-first century. By the time of Lyndon Johnson’s “Great Society” in the 1960s, the ideology of liberty—the idea that the government’s role is to protect people’s rights—had been transformed into the ideology of democracy, the idea that the government’s role is to carry out the will of the people. 3 The progressive ideology has been accepted even by 56 LIBERALISM AND CRONYISM
Page 1 and 2:
LIBERALISM AND CRONYISM Two Rival P
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LIBERALISM AND CRONYISM: TWO RIVAL
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CONTENTS Introduction 1 Chapter 1:
Page 10 and 11:
INTRODUCTION People often see polit
Page 12 and 13: who have the power to make decision
Page 14 and 15: CHAPTER 1: LAYING A FOUNDATION Befo
Page 16 and 17: hijacking of the term to describe a
Page 18 and 19: esources can be taken from some for
Page 20 and 21: suffers from “market failure,”
Page 22: is a group of cronies in a dictator
Page 25 and 26: ecause it permits voluntary exchang
Page 27 and 28: people’s economic well-being. The
Page 29 and 30: consumer demands. Examples of rent-
Page 31 and 32: the Politburo and the needs of conn
Page 33 and 34: consider the benefits and costs of
Page 35 and 36: upon state privilege and disproport
Page 37 and 38: their loyalty to the socialist stat
Page 39 and 40: cronyism from gripping every area i
Page 41 and 42: communism are well documented and w
Page 43 and 44: Accountability was embodied by refo
Page 45 and 46: despite comprising only 3 percent o
Page 48 and 49: CHAPTER 5: FASCISM Fascism, the pol
Page 50 and 51: use the sword of the Nazi state to
Page 52 and 53: planners created a back door for in
Page 54 and 55: CHAPTER 6: CORPORATISM Corporatism
Page 56 and 57: puts men and their possibilities in
Page 58: that this form of guided capitalism
Page 61 and 62: therefore provide sufficient benefi
Page 66 and 67: people who argue for limited govern
Page 68: Security, Medicare, and Medicaid do
Page 71 and 72: the direct election of senators, ch
Page 73 and 74: argue for narrow individual interes
Page 75 and 76: their roots to diverse sources of i
Page 77 and 78: promises to assume a company’s de
Page 79 and 80: enefits for his former venture capi
Page 81 and 82: prices of firms within the textile
Page 83 and 84: ment the power to make decisions an
Page 85 and 86: of social justice, cronyism has an
Page 87 and 88: for women in the twentieth century,
Page 89 and 90: ecause it advocates granting these
Page 91 and 92: should pay the same as comparable b
Page 93 and 94: way, the US government replaced the
Page 95 and 96: an individual, social justice advoc
Page 98 and 99: CHAPTER 12: CRONY CAPITALISM AND DE
Page 100 and 101: subsidies, political connections di
Page 102 and 103: CHAPTER 13: INDUSTRIAL POLICY The t
Page 104 and 105: “cottage industries” that clust
Page 106 and 107: of complex systems. He applied this
Page 108 and 109: South Korean industrial policy gave
Page 110: The degree to which Japan’s and S
Page 113 and 114:
to get involved in lobbying to prot
Page 116 and 117:
CHAPTER 15: LIBERALISM VERSUS CRONY
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that power will arise with another
Page 121 and 122:
with power support each other to ma
Page 123 and 124:
an incentive to cooperate for the b
Page 125:
environmental movement often advoca
Page 129 and 130:
6. Ludwig von Mises, Human Action,
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12. James Heinzen, “The Art of th
Page 133 and 134:
CHAPTER 5: FASCISM 1. Peter Temin,
Page 135 and 136:
CHAPTER 8: PROGRESSIVISM 1. Terry L
Page 137 and 138:
16. Bruce Yandle, “Bootleggers an
Page 139 and 140:
3. Eamonn Fingleton, “Japan’s I
Page 142 and 143:
FURTHER READING Acemoglu, Daron and
Page 144 and 145:
ABOUT THE AUTHORS Randall G. Holcom
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